The Reserve Bank of India issued a direction to Authorised Dealer Category-I banks extending the permitted time period for outlay of foreign exchange in merchanting trade transactions (MTT) from four months to six months, with immediate effect. Other MTT conditions under the January 2020 directions remain unchanged, including that the entire MTT must be completed within an overall period of nine months, with the commencement and completion dates determined by the first and last of shipment, export-leg receipt, or import-leg payment. AD banks are expected to notify affected constituents and customers. The instruction is issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999, and does not remove any other permissions or approvals that may be required under other laws.
Reserve Bank of India 2025-10-01
Reserve Bank of India extends foreign exchange outlay period for merchanting trade transactions to six months
The Reserve Bank of India has extended the foreign exchange outlay period for merchanting trade transactions from four to six months, effective immediately. Other conditions from the January 2020 directions remain unchanged, including the nine-month completion period for MTT. This directive is issued under the Foreign Exchange Management Act, 1999.